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IDC Says Nintendo’s ‘Break Down That Wall’ Game Plan Will Allow Its Wii to Outship and Outsell the Xbox 360 and PS3

FRAMINGHAM, MA – MARCH 1, 2007 – Now that Microsoft, Sony, and Nintendo all have their videogame consoles in the market, the transitional phase of the console cycle is in full effect as each vendor has entered the game. What is interesting about this particular generation of gaming manufacturers is that each vendor has clearly differentiated hardware and strategies. Who will win? IDC says none of the three new consoles will dominate the market in the next five years like the PS2 dominated last cycle; however, Nintendo's Wii will outship and outsell the 360 and PS3 in 2007 and 2008.

IDC says Microsoft's Xbox 360 was the best selling current generation console for 2006 because it enjoyed a full year lead in the market. Microsoft is relishing in the PS3's launch slip-ups, where PS3 supply deficits diminished profits. The battle is heating up between the 360 and PS3, as the two gaming manufacturers target the same hardcore/enthusiast gamer to dominate the market.

Nintendo, on the other hand, is the only one of the three manufacturers working to grow its total accessible market for its hardware and software by broadening its audience beyond the traditional market. Nintendo has designed its latest hardware and software to be more inviting and fun, and less intimidating for non-gamers including those who may never self-identify as a gamer. Nintendo also enjoys support from the fan base it has captured with successful first party franchises. IDC believes hardware shipments of Nintendo's Wii will capture a little more than a third of the worldwide market by 2008, rising slightly above Sony's PS3 and Microsoft's Xbox 360.

"With the Wii, Nintendo is abdicating the specification war, leaving Sony and Microsoft to slug it out between themselves for the hardcore market," says Billy Pidgeon, program manager of IDC's Consumer Markets: Gaming program. "We believe concerted efforts to broaden the appeal of videogames beyond the traditional enthusiast/hardcore base will deepen the industry's penetration. This is good news for an industry that seemed to be receding last year due to over-saturation of the core base."

This IDC study, Worldwide Videogame Console Hardware and Software Forecast 2006-2011: Ready for a New Game (IDC #205659), provides an analysis of the worldwide videogame console and handheld hardware and software markets. In addition to a high-level overview of market trends and competitive differences, it also provides a forecast by major region (North America, Western Europe, Japan and the rest of the world (ROW)) of hardware and software shipments by platform and hardware and software revenue in aggregate.

Meet one-on-one with Billy Pidgeon at IDC's Directions 2007 conference in San Jose on March 6, 2007. At this event, titled Finding Opportunities in an Era of Disruption, IDC's leading analysts will discuss the growing uncertainties in the technology market and illuminate key growth opportunities available to attendees. This year's agenda features a keynote session by Don Tapscott, one of the world's leading business strategists and author of 11 books, most recently Wikinomics: How Mass Collaboration Changes Everything. Find out more at http://www.idc.com/directions07 .

To purchase this document, call IDC's Sales hotline at 508-988-7988 or email sales@idc.com.

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. Over 850 IDC analysts in 50 countries provide global, regional, and local expertise on technology and industry opportunities and trends. For more than 42 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com .

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